Kona Grill at CityPlace closes despite rise in earnings

Seasonality, volume challenged business model despite aggressive use of social media to attract local customers

August 3, 2011|By Emily Roach, Palm Beach Post

Kona Grill at CityPlace in West Palm Beach closed its doors Sunday night after 2 1/2 years of trying to gain ground in the struggling economy.

"Since the restaurant opened in November 2008, it has been challenged by volume and seasonality, particularly in contrast to our other highly successful locations," noted Mike Nahkunst, interim president and CEO of Kona Grill, in a company press release Monday.

General Manager Tommy Pryzybylski said the American grill and sushi restaurant uses social media to build a loyal fanbase and had valued customers in the area. It was located at the corner of Okeechobee Boulevard and Rosemary Avenue.

"We've been trying any number of different things to get this thing turned around," he said. "Unfortunately at the end of the day, it was a model that just wasn't working."

Last week the restaurant chain released earnings for the second quarter showing increased restaurant sales and net income for the Scottsdale, Ariz., corporation. It lowered its third quarter restaurant sales estimate by $400,000 to account for the West Palm Beach closing, according to the release.

"We believe the closure will ultimately improve future profitability by allowing us to focus our resources on improving the performance of our other 24 locations, as well as allowing us to better prepare for additional restaurant openings in 2012," Nahkunst further stated.

The stock has steadily risen since Nahkunst, a veteran of The Cheesecake Factory and BJ's Restaurants, took over in June, though far from $20-a-share it reached in 2007. The corporation's remaining Florida location is in Tampa.